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NASHVILLE — Republican legislative leaders are eyeing a plan they hope could eventually boost health care coverage to more of Tennessee's working poor by shifting to a federal block grant system.

But Lt. Gov. Randy McNally, R-Oak Ridge, and top GOP colleagues insist it is in no way an expansion of Tennessee's existing $12.1 billion Medicaid program, TennCare, under the Affordable Care Act created by former President Barack Obama, which state GOP lawmakers have repeatedly rejected.

Rather, McNally and others see it as a potential follow-up if a bill introduced in the General Assembly passes. Sponsored by Sen. Paul Bailey, R-Sparta, and Rep. Timothy Hill, R-Blountville, the legislation directs Gov. Bill Lee to seek federal approval for waiving existing Medicaid rules.

If successful, it would transform Uncle Sam's current TennCare funding, through which state expenditures for the existing Medicaid population are now matched on a two- and sometimes three-to-one basis by the federal government, to a federal block grant system with fewer strings attached.

The Bailey/Hill bill also seeks to have federal block grant funding tied to increases in the TennCare population and inflation. Proponents say fewer strings could lead to cost savings.

If that wins approval, McNally told reporters Thursday, Republicans hope to "address the population that's below 138 percent of the poverty level and address it on a sliding scale." McNally, who is the Senate speaker, cited potential use of a "voucher-type thing, health savings account" for the working poor.

The low-wage workers might be able to use the money to afford their employers' health insurance coverage if the Trump administration agrees, McNally suggested.

"There's a number of different options that we really haven't fleshed out yet," he acknowledged.

It would hinge on the Trump administration's willingness to approve a block grant program for all of TennCare, the purpose of the Bailey and Hill bill, or just the expansion population.

The Republican-dominated Legislature in 2015 rejected then-Gov. Bill Haslam's Insure Tennessee plan to cover an estimated 280,000 to 300,000 low-income working adults under the Affordable Care Act. Repeated efforts by minority Democrats to resurrect the proposal have gone nowhere.

The law, branded as "Obamacare" by national Republicans, initially provided full funding for expansion, with the federal share decreasing to 90 percent in 2020. Democratic critics have blasted Republicans, saying the state has lost out on billions of federal dollars while rural hospitals have closed.

Thirty-four states, including a number of Republican-governed states, and the District of Columbia have since adopted Medicaid expansion under the Affordable Care Act.

Tennessee Senate Majority Leader Jack Johnson, R-Franklin, said of Republicans' current strategy that he believes "the first part of the conversation is to say what can we do to make our existing Medicaid program more efficient and better in terms of delivering quality care for those people who are eligible."

Subsequently, he explained, "we can have conversations about how do we help these working poor — as they're often referred to. [R]ather than putting more people on a government-run health care program, we'd much rather see them get quality coverage through their employer in the private market."

Senate Minority Leader Jeff Yarbro, D-Nashville, called "expanding access to affordable health care a pivotal, necessary conversation for the state that we're way behind having."

But Yarbro said the proposal as filed by Bailey doesn't "expand coverage for a single person or make health care more affordable for a single soul. The bill as drafted would diminish coverage rather than expand it."

The bill in its present state "does nothing to cover working families, protect rural hospitals or support people with pre-existing medical conditions," said Tennessee Justice Center Executive Director Michele Johnson of the Bailey/Hill bill. "But we take hope from the comments of legislators who say they want to do those things, and we hope they will amend it."

But she said if what the sponsors mean by a "block grant" means the state "will get a blank check and no accountability for how it spends billions of federal taxpayer dollars, that is illegal under federal law and a dead end."

During his campaign last year, now-Gov. Lee opposed expanding Medicaid under the ACA, saying "expanding Medicaid is not the solution." He pledged to address rising costs.

Speaking Thursday with reporters after an address to the Tennessee Press Association, Lee said "my position on Medicaid expansion hasn't changed. We absolutely want to find solutions. And it's really important we do that."

Regarding the idea of block grants, the governor noted, "the legislature is looking at that. I will look at whatever they propose, certainly want to work with the federal government in any way we can, primarily to lower costs with our existing system and then to see where we go from there."

He also added: "As I've said before, Medicaid expansion isn't the way to go, but lowering the cost of health care so more people can afford it is the way to go."

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.

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